This is a legal agreement between you (the “Client”) and Drillimation Systems Co., Ltd. (hereinafter “Drillimation” or the “Company”), a corporation duly organized and existing under the laws of the Commonwealth of Pennsylvania with its principal place of business in Erie, Pennsylvania, United States of America.
I. Definitions
As used herein, the following terms shall have the meanings set below:
- The Client is of the opinion that Drillimation has the necessary qualifications, experience, and abilities to provide services to you.
- The Company is agreeable to providing such services to the Client on the terms and conditions set forth in this agreement.
- The Product refers to any work such as a motion picture or other audiovisual work.
- The Recordings refers to any musical work or compositions affixed into digital audio files for use within the Products (referred to as a phonorecord).
II. Term
This legal agreement between you and Drillimation shall commence on the day this agreement is signed by you and will continue in full force and effect until the recordings produced for your Product are complete, including manufacturing, marketing, and distribution.
The recordings produced for your Product shall be defined as any original or previously unrecorded musical work or compositions that Drillimation provides for you. The work shall be defined as the final work offered for sale to the public or be used in any audiovisual content you make.
III. Agreement of Production
During the term of this contract, Drillimation will agree to create any musical work or compositions and provide such recordings for your Product. The statutory rates for each song shall be set at $6-14 per minute. The musical work or compositions produced by Drillimation shall be subject to final approval or rejection by you. Drillimation agrees the musical work or compositions, including their recordings, will be original and previously unrecorded. You and Drillimation agree the recordings will be sold and/or reproduced under Drillimation Records, which is Drillimation’s official record label.
Drillimation agrees the musical work or compositions, and their associated recordings will be produced, distributed, promoted, or sold within an album that you request, in both physical and digital channels. You will be in charge of final approval of the quality of the musical work or compositions, and their recordings, including ensuring that musical work or compositions, and their recordings that are technically appropriate for commercial production and distribution. You may request any work or composition to be re-recorded or reworked if you do not feel it is fit for your Product.
You agree to collaborate with Drillimation on all creative endeavors, including musical works, titles, and designs. You acknowledge and agree that all musical works and compositions, including their recordings, are prohibited from being disclosed to the public by you until the release of the final product, or before release, an official trailer or demo of your Product.
IV. Studio Details
All musical works and compositions, including the recordings, will be produced at Drillimation Systems Co., Ltd. Drillimation may produce such works and recordings at any time or upon request by you.
V. No Competition
For the duration of this agreement, Drillimation shall not perform under any other name besides Drillimation, and you shall not contract any other company, artist, or record label to commission any musical work, composition, or recording for your Product. You agree and Drillimation recognizes that the musical works or compositions, and their recordings, may be used or repurposed in future products produced by Drillimation, if in the rare event your Project is deprecated or cancelled.
VI. Reserved Rights and Intellectual Property Assignment
Drillimation Systems Co., Ltd. shall be the owner of all intellectual property rights associated with the musical works and compositions, and their recordings. This is to ensure that Drillimation may either distribute or commercially exploit the work. Drillimation shall grant you a perpetual synchronization license to use the recordings in your Product. Drillimation also expects royalty payments for every copy of your Product that is either exhibited, advertised, marketed, distributed, publicly performed, reproduced, and adapted. Drillimation shall set the statutory rate at 15% of your product’s manufacturer’s suggested retail price (MSRP). Drillimation shall also have the right to apply for registration of the musical works and compositions, and their recordings, with the United States Copyright Office.
VII. License
You agree to grant Drillimation a perpetual license to use the trademarks associated with your Product for the marketing of any of the musical works or compositions, and their recordings, as well as manufacturing and distributing any musical work or composition, and their recordings, in conjunction with any other products produced by Drillimation Systems.
VIII. Fees and Costs
You will pay for all costs that, by the industry standards, relate to the production of any musical work or composition that you request for your Product. These costs include each minute of a musical work or composition’s recording. The statutory rates shall be set at $6-14 per minute. You also agree to pay Drillimation royalties for every copy of your final Product sold at the percentage of 15% per copy. These royalties will be calculated in U.S. dollars. You are also responsible for paying all income taxes incurred on the sale of such copies.
IX. Representation
You represent and warrant that there are no other encumbrances to the musical work or compositions, and their recordings, and that Drillimation is the exclusive holder of any and all rights in and to the musical work and compositions, and their recordings. You further warrant that no person or entity has any other ownership or interest in or to the musical compositions or compositions, and their recordings, and that no other person or entity has any legal documentation evidencing any such interest or ownership. You further warrant that Drillimation may legally grant all necessary rights to you for the release of your final product and that Drillimation would fully own the rights to the musical work and compositions, and their recordings at the conclusion of this agreement.
X. Option to Purchase
At any time during the term of this agreement or after its termination, you may request to purchase all rights to any musical work or composition, and their recordings that may have been assigned to Drillimation for a total of $15 per work.
XI. Right to Audit
At any time during the term of this agreement or within one (1) year after termination, you or your designated officers shall be permitted unrestricted access to all of the financial records or accounts of Drillimation that may relate to, or involve you in any way, for inspection by you or your designated officers.
You shall be responsible for any fees or costs incurred in relation to this audit unless sufficient suspicious activity is found. In the case that Drillimation is found to have neglected to fulfill their financial obligations to you, Drillimation will then be responsible for all fees and costs incurred by the audit.
XII. Injunction
You hereby acknowledge and agree that in the event that you violate the terms of this agreement, Drillimation may be harmed irreparably, and money damages will be insufficient to compensate Drillimation. Should this agreement be breached in any way, Drillimation will be entitled to seek injunctive relief along with monetary damages, as well as to seek reasonable costs, including attorney’s fees, incurred in enforcing this agreement.
You hereby agree that if you violate any of the terms of this agreement, you shall owe Drillimation an accounting of all profits or benefits, monetary or otherwise, which you have realized from the violation of the terms. You also acknowledge and agree that you shall repay Drillimation for any and all of these profits or benefits and that Drillimation shall also be entitled to injunctive relief or any other rights or remedies at law or in equity.
XIII. Termination
If in the event of illness or injury where either party is no longer able to execute any actions in development of any musical work or composition, or any recording, in the same manner as either party was able to upon the beginning of this agreement, Drillimation reserves the right to terminate this agreement. In the event that you do not release the final product containing any musical work, composition, or recording produced by Drillimation, Drillimation may release the final product within one (1) calendar month. If the final product is not released within that one (1) calendar month period, you may terminate this agreement in its entirety.
XIV. Specific Terms
Drillimation may withhold permission for you to exhibit, advertise, market, distribute, publicly perform, reproduce, or adapt any musical work, composition, or recording at any time. If you violate Drillimation’s wishes in this note, Drillimation may terminate this agreement. This agreement does not constitute any joint venture or partnership between the parties. Drillimation is an independent contractor for you.
XV. No Waiver
Failure of either party to enforce any term of this agreement shall not constitute waiver of such term or any other term. None of the terms of this agreement shall be deemed to have been waived by any act or acquiescence of either party. Only an additional written agreement can constitute a waiver of any of the terms of this agreement between the parties. No waiver of any term or provision of this agreement shall constitute a waiver of any other term or provision or of the same provision on a future date.
XVI. Notices
All notices, requests, consents, claims, demands, waivers, and other communications hereunder (each, a “Notice”) shall be in writing and addressed to the parties at the addresses set forth. All Notices shall be delivered by email. Except as otherwise provided in this agreement, a Notice is effective only if (a) the receiving party has received the Notice and (b) the party giving the Notice has complied with the requirements of this section.
XVII. Governing Law and Dispute Resolution
This agreement shall be governed by the laws of the Commonwealth of Pennsylvania, with jurisdiction being served in Erie County (if in state court) and the Western District of Pennsylvania (if in federal court). If in the event of a dispute, the parties will first attempt to resolve the dispute through friendly correspondence. If such correspondence is not successful at resolution, the parties must then submit the issue to binding arbitration.
If you are based in the United States, disputes must be submitted to the American Arbitration Association (“AAA”) and the arbitration shall be conducted in the Erie County Court of Common Pleas or in the county of your residence and the arbitrator’s decision will be final. If you are based outside the United States, you will need to submit your dispute to the International Centre for Dispute Resolution (“ICDR”).
XVIII. Headings
Headings to this agreement are for convenience only. Headings shall in no way affect the provisions themselves and shall not be construed in any way that would limit or otherwise affect the terms of this agreement.
XIX. No Assignment
The rights and benefits under this agreement may not be assigned in whole or part by either party.
XX. Relationship of the Parties
Nothing in this agreement shall be construed to create a joint venture, agency, or other legal relationship between the parties other than that of independent contractors.
XXI. Counsel
Each of the parties acknowledges and agrees that they have had the opportunity to have this agreement reviewed by legal counsel and either they have done so or waived that right. The parties agree that they are entering into this agreement voluntarily and with full understanding of the terms contained herein.
Drillimation Systems 